Freezing Assets in the Netherlands and the EU (1)Wednesday, 22 March 2017
In the Netherlands, it is relatively easy for creditors to seize assets. If you feel you have a legitimate claim, and you can locate assets in the Netherlands or the EU, it may be worthwhile to ask Dutch courts permission to seize or freeze these assets. You will put pressure on your debtor – and make sure in the end, your claim is paid.
This is the 1st in a series on how to seize assets in the Netherlands and the EU. Other contributions will be published shortly.
The Netherlands is a hub for international business. Also in terms of finance. For tax purposes, many companies have a seat in Amsterdam, or other corporate links to the jurisdiction. This means in many cases, you will be able to locate debtor assets in the Netherlands.
You can seize assets before, during or after litigation. This series focuses exclusively on pre-trial seizure. In this blog, we’ll be discussing seizure in the Netherlands. Later on we’ll also discuss seizing assets elsewhere in the EU.
Which assets can be freezed and seized in the Netherlands?
Dutch law puts most assets up for pre-trial seizure. If you feel you have a legitimate claim, you can seize for example the following assets:
- Moveable assets owned by the debtor (e.g. bank accounts, cars, jewelry, inventory, trading stock)
- Moveable assets owned by the debtor that are in your possession, as creditor
- Moveable assets owned by the debtor that are in the possession of third parties
- Immoveable assets owned by the debtor (e.g. real estate, ships, aircraft)
- Shares, securities and certain other financial instruments
- Self-seizure (i.e. claims the debtor may have on you, as creditor)
- Claims the debtor may have on third parties)
- Intellectual property
There are more assets that can be seized following a freezing injunction (i.e. a pre-trial conservatory order). However, these are targeted most often.
How do you obtain a Dutch freezing injunction?
First and foremost, you will need to find the target assets. These must be located in the Netherlands. It is not required, however, that the plaintiff or the defendant are located or living in the Netherlands.
Once target assets are identified, you must obtain a court order. For any asset to be seized and freezed, this will require: (1) a Dutch lawyer; (2) who writes an seizure application (“beslagrekest”); (3) which results in a court order; and finally (4) a bailiff that executes the court order.
The precise conditions for obtaining a court order vary according to the nature of the asset. We can fill you in on any details. Contact us for more information.
How long does it take?
In most cases, Dutch courts move very quickly. We often find assets can be seized in a day or two. Moreover, in the vast majority of cases the court order is given ex parte, meaning the other party does not get a hearing and does not know anything about the seizure, until it’s too late (surprise effect).
How long does it last?
Freezing assets is done for a limited period of time. Normally, the court order allowing the seizure of assets also stipulates that if it is used, the party freezing the assets must initiate main legal proceedings within a couple of weeks. If that happens, the assets remain frozen until final judgment. However, if legal proceedings are not initiated in time, the freeze is lifted.
How much does it cost?
Freezing assets is relatively cheap. Especially when one takes into account that it secures assets. In many other jurisdictions, parties litigate for years on end, only to find out that there are no assets left to liquidate (a so-called Pyrrhic victory). In the Netherlands, this problem is neutralized by the opportunity to freeze assets early on.
You will incur legal costs. The courts in 2017 send invoices up to EUR 619. In addition, you will need to pay your Dutch lawyer and bailiff. In many cases, however, legal costs do not supersede EUR 1,500-2,000.